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Manufacturing PMI Stands at 44.6% in February 2017 from 48.2% in January 2017 - CBN

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Wednesday, March 01, 2017 6:25 PM/ CBN 

Data and Method of Presentation

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on data compiled from purchasing and supply executives. Survey responses indicate whether there is change or no change in the level of business activities in the current month compared with the previous month.

For each of the indicators measured, this report shows the diffusion index of the responses. The diffusion index is computed as the percent of positive responses plus one-half of the percent of those reporting no change.

The composite PMI is then computed as the weighted average of five diffusion indices for manufacturing sector: production level, new orders, supplier delivery time, employment level and raw materials inventory, with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively.

The composite PMI for non-manufacturing sector is computed from four diffusion indices: business activity, new orders, employment level and raw materials inventory, with equal weights of 25% each.

A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally declining. The sub-sectors reporting growth are listed in the order of highest to lowest growth. For the sub-sectors reporting contraction/decline, they are listed in the order of the highest to the lowest decline.

Manufacturing PMI Report
Production level declining from expansion, new orders declining at a faster rate, supplier delivery time worsening at a slower rate, employment level declining faster, and raw material inventories declining at a faster rate


The Manufacturing PMI stood at 44.6 index points in February 2017, indicating declines in the manufacturing sector for two consecutive months after an incidence of expansion in December 2016 (Fig. 2, Table 1, Appendix I).

Fourteen of the sixteen sub-sectors reported declines in the review month in the following order: transportation equipment; paper products; electrical equipment; printing & related support activities; fabricated metal products; chemical & pharmaceutical products; furniture & related products; cement; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear; computer & electronic products; nonmetallic mineral products and primary metal.

The appliances & components and food, beverage & tobacco products subsectors reported expansion in the review period.



Fig. 2: Trend of Manufacturing PMI

Table 1: Manufacturing at a Glance



Production Level

The production level index for manufacturing sector contracted in February 2017. The index at 45.2 points indicated a decline in production level when compared to the 51.3 points in the previous month.

Twelve manufacturing sub-sectors recorded declines in production level during the review month in the following order: electrical equipment; paper products; transportation equipment; chemical & pharmaceutical products; plastics & rubber products; furniture & related products; fabricated metal products; printing & related support activities; computer & electronic products; primary metal; textile, apparel, leather & footwear and cement.

The petroleum & coal products sub-sector remained unchanged, while the appliances & components; food, beverage & tobacco products and nonmetallic mineral products recorded growth in production (Table 2).

Table 2: Production at a Glance



New Orders

At 44.0 points, the index declined for the second consecutive month after recording growth recording expansion in December 2016. The index declined at a faster rate when compared to the level achieved in January 2017.

Thirteen sub-sectors reported decline in new orders in the order: transportation equipment; paper products; printing & related support activities; fabricated metal products; cement; furniture & related products; petroleum & coal products; electrical equipment; textile, apparel, leather & footwear; chemical & pharmaceutical products; computer & electronic products; primary metal and nonmetallic mineral products, while the remaining three sub-sectors grew in the order: appliances & components; plastics & rubber products and food, beverage & tobacco products. (Table 3).

Table 3: New Orders at a Glance

 

Supplier Delivery Time

At 48.7 index points, the supplier delivery time index for manufacturing sub-sectors worsened for the third consecutive month, but at a much slower rate in the month of February 2017.

Six sub-sectors recorded worsening suppliers’ delivery time in the following order: plastics & rubber products; nonmetallic mineral products; food, beverage & tobacco products; cement; paper products and chemical & pharmaceutical products.

The primary metal, transportation equipment and appliances & components sub-sector remained unchanged, while the computer & electronic products; petroleum & coal products; textile, apparel, leather & footwear; fabricated metal products; electrical equipment; printing & related support activities and furniture & related products sub-sectors recorded improving delivery time in February 2017 (Table 4).

Table 4: Supplier Delivery Time at a Glance



Employment Level

Employment level index in the month of February 2017 stood at 41.7 points, indicating declines in employment level for the twenty-fourth consecutive month.

However, the index declined at a faster rate when compared with the level in the preceding month. Of the sixteen sub-sectors, fourteen recorded declines in the following order: transportation equipment; electrical equipment; printing & related support activities; computer & electronic products; chemical & pharmaceutical products; fabricated metal products; petroleum & coal products; appliances & components; furniture & related products; textile, apparel, leather & footwear; nonmetallic mineral products; plastics & rubber products; paper products and cement.

The primary metal sub-sectors remained unchanged, while only the food, beverage & tobacco products sub-sector recorded growth during the review period (Table 5).

Table 5: Employment Level at a Glance



Raw Materials Inventory

At 44.8 points, the raw materials inventory index declined for two consecutive months. Of the sixteen sub-sectors, eleven recorded declines in raw materials inventories in the order: petroleum & coal products; transportation equipment; paper products; furniture & related products; cement; chemical & pharmaceutical products; printing & related support activities; textile, apparel, leather & footwear; fabricated metal products; plastics & rubber products and electrical equipment.

The remaining five sub-sectors recorded increase in inventories in the order: appliances & components; primary metal; nonmetallic mineral products; computer & electronic products and food, beverage & tobacco products (Table 6)

Table 6: Raw Materials Inventories at a Glance



Non-Manufacturing PMI

Business activity, new orders, employment level and raw materials inventories declining in February 2017


The composite PMI for the non-manufacturing sector declined for the fourteenth consecutive month. The index stood at 44.5 points, indicating a faster decline when compared to the 49.4 points in January 2017.

Of the eighteen non-manufacturing sub-sectors, fifteen recorded declines in the following order: construction; professional, scientific, & technical services; water supply, sewage & waste management; accommodation & food services; public administration; arts, entertainment & recreation; real estate, rental & leasing; utilities; wholesale trade; information & communication; finance & insurance; repair, maintenance/washing of motor vehicles…; health care & social assistance; electricity, gas, steam & air conditioning supply and transportation & warehousing.

The management of companies remained the same, while the educational services and agriculture reported increase in the review month (Table 7 and Fig. 3).

Table 7: Non-Manufacturing at a Glance

 


Fig. 3: Trend of Non-Manufacturing PMI 

Business Activity

The business activity index dropped to 45.4 points in February 2017, from its expansionary level of 50.6 points in January 2017.

Fifteen sub-sectors recorded declines in the following order: construction; water supply, sewage & waste management; professional, scientific, & technical services; arts, entertainment & recreation; utilities; accommodation & food services; real estate, rental & leasing; information & communication; management of companies; public administration; wholesale trade; repair, maintenance/washing of motor vehicles…; finance & insurance; electricity, gas, steam & air conditioning supply and health care & social assistance, while the remaining three sub-sectors recorded growth in the order: agriculture; educational services and transportation & warehousing (Table 8).

Table 8: Business Activity at a Glance



New Orders
At 44.9 points, the new orders index declined at a faster rate in February 2017 after thirteen months consecutive decline.

Of the eighteen sub-sectors, fourteen declined in the following order: construction; professional, scientific, & technical services; accommodation & food services; water supply, sewage & waste management; real estate, rental & leasing; arts, entertainment & recreation; utilities; public administration; finance & insurance; wholesale trade; information & communication; repair, maintenance/washing of motor vehicles…; health care & social assistance and transportation & warehousing.

The electricity, gas, steam & air conditioning supply sub-sector remained unchanged, while the remaining three sub-sectors recorded growth in the order: management of companies; educational services and agriculture (Table 9).

Table 9: New Orders at a Glance

Employment Level

The employment level Index for the non-manufacturing sector stood at 42.6 points indicating a decline in employment for the fourteen consecutive months.

Sixteen sub-sectors recorded declines in employment level in the following order: construction; utilities; information & communication; professional, scientific, & technical services; health care & social assistance; water supply, sewage & waste management; wholesale trade; arts, entertainment & recreation; accommodation & food services; finance & insurance; electricity, gas, steam & air conditioning supply; real estate, rental & leasing; public administration; transportation & warehousing; repair, maintenance/washing of motor vehicles… and agriculture.

The management of companies sub-sector remained unchanged, while the educational services sub-sectors grew in the review month (Table 10).

Table 10: Employment at a Glance

Inventories/Work in Progress

Non-manufacturing inventories/work in progress index fell in February 2017 to 44.9 points from the 52.0 points in the previous month.

Thirteen sub-sectors recorded lower inventories in the following order: public administration; repair, maintenance/washing of motor vehicles…; construction; water supply, sewage & waste management; wholesale trade; finance & insurance; professional, scientific, & technical services; accommodation & food services; health care & social assistance; real estate, rental & leasing; electricity, gas, steam & air conditioning supply; arts, entertainment & recreation and agriculture.

The educational services; information & communication and management of companies sub sectors remain unchanged, while the utilities and transportation & warehousing subsectors recorded higher inventory (Table 11).

Table 11: Raw Materials Inventories at a Glance




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